Annexation and the airport -- Council doing its job

Oddly pleasant, as I walked through the Tulsa International Airport late Friday night, to be able to put two quarters into a paper box and pull out a copy of the latest Tulsa Beacon, with the headline, "Feds will help with local airport probe." This story and the other above-the-fold story ("Councilor thwarts annexation") tell the tale of a City Council majority that is working to protect the city's investments, despite the sniping of the Whirled and other establishment voices.

The Council will likely move ahead with its own probe of the airport, with assurances from the U. S. Department of Transportation's Office of Inspector General (OIG) that the Council's investigation will not be a hindrance, but will be welcome. The City has interests in the operation of Tulsa's airports that aren't matters of federal concern, and the OIG appears to be eager to pass along information about matters that fit this description. (Jim Myers of the Whirled's Washington bureau wrote about this last Wednesday -- jump page here.)

The Beacon's story has a very concise and comprehensible explanation of the land transaction that the OIG is interested in:

The City of Tulsa transferred 344 acres of land adjacent to the airport to the TIA so that TIA could use the land as collateral for the loan to Great Plains. On December 21, 2000, the Bank of Oklahoma and TIA entered into a loan agreement to issue two revenue notes of $15 million each. TIA then provided a loan totaling $30 million to Great Plains.

Also on December 21, 2000, the Bank, TIA, and Tulsa Airports Improvement Trust [TAIT] signed a separate “support agreement” in which the airport agreed that if Great Plains defaulted on its loan, the airport would purchase the property for an amount equal to the outstanding debt owed by Great Plains plus any other unpaid amounts due under the loan agreement (i.e., interest and collection costs, attorney fees).

In 2001, Great Plains paid back one of the $15 million revenue notes using state-issued tax credits. Since the agreements were signed, the bank has disbursed $8.25 million to Great Plains from the second $15 million note. The remaining $6.75 million was held in an escrow account to protect the Bank’s interest in the loan. Under the terms of the note, Great Plains was required to make monthly payments until December 21, 2003, at which time it was to have paid the outstanding loan amount in full.

On the annexation issue, there was and still is potential for a compromise that will protect the City's investments without trampling on the property owners who don't want to be annexed and without committing the city to expensive infrastructure improvements. Unfortunately, rather than working toward that compromise, Council Chairman Randy Sullivan went back on his word and put the item on the agenda when one of the councilors opposing annexation was scheduled to be out of town. Although Sullivan's proposal would not have annexed all of the north annexation area, it would have created a wide enough fenceline to allow forced annexation after November 1 (the deadline created by new state law), and it would have committed the City to building infrastructure in the area even before it is annexed. (For whatever reason, the proposed ordinance is not accessible online.)

There is an area we should consider annexing or leaving Tulsa the option of annexing forcibly at a later date, and that's the Cherokee Industrial Park, which represents a significant investment by the City in infrastructure. We also ought to consider annexing (with landowners' permission) a strip along US 75 where commercial development would be encouraged. That's the kind of development we need to boost city sales tax receipts. Housing and industrial development will only help the city to the extent that it indirectly encourages retail development. These facilities don't generate sales tax -- industrial facilities may generate some use tax receipts -- but they do generate property tax, which would mostly go to help the schools in Owasso and encourage more people to live and shop in Owasso.

We missed the chance to annex a commercial area at the principal highway entrance to Tulsa -- I-44 east of the Turner Turnpike gate. Owners would have preferred to be taken into Tulsa if they had to be annexed, but instead Sapulpa lassoed the area with its fenceline and recently annexed it, prompting a group of property owners to sue Sapulpa.

Berryhill residents reportedly would prefer to be in the City of Tulsa rather than in Sand Springs -- we should take advantage of that willingness while we can.